RadioShack bankruptcy indicates changes ahead for retail

Last week, RadioShack announced bankruptcy and reported the potential sale of half its brick-and-mortar stores to Sprint.

RadioShack currently has 4,291 store locations in the United States, 274 in Mexico and 1,000 franchise stores spread across 25 countries. US News & World Report said that the company has been struggling over recent years as the result of the high real estate costs of maintaining their many physical sales locations, in addition to the dip in sales attributed to the increase in online competitors.

Sprint, with financing from its merger with SoftBank, is planning to move into RadioShack storefronts in the second half of 2015, using the space to sell mobile devices under a co-branded strategy. Amazon is also rumored to be considering a bid on the properties, to be used as a showcase for products like the Kindle or the Fire Phone, and also as shipping outposts for online orders.

RadioShack has been struggling for years to remain relevant in a frequently changing technological marketplace where Apple and online retailers are dominating sales.

"Given its stated focus on consumers and small- to mid-sized business customers, having more retail outlets is a plus for Sprint," one analyst told US News. "However, I'd question the value of having those outlets submerged inside the stores of a retail brand that's fading, not rising, and now is in bankruptcy. It's baffling why Sprint doesn't buy these stores outright from RadioShack, turn them into Sprint stores and distance themselves from the damaged brand."

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